A common funding tool for early startups is the 'family and friends' round. The Jim Koch version of this was the 'family, friends, and drinking buddies' round, a modest $150,00 in small chunks, plus his own $100,000 in savings, which he used to start the Boston Beer Company in 1984.

That was enough to hire one partner, brew a batch of Samuel Adams Boston Lager from his family recipe, and start selling it - bar to bar, one case at a time - out of the back of his car. Fancy office space and a legion of salespeople weren't in the early business plan.

I sat down with Koch recently to talk about his new book “Quench Your Thirst: Lessons Learned Over a Beer or Two.” His story of starting a brewery when no one started breweries, then building it into a $3 billion company and the template for today’s craft beer movement, is worth the cover price for fans of entrepreneurial memoir. But it’s inspirational for anyone thinking of putting themselves on a more satisfying career path.

The bonus is it’s a business book offered in friendly, colorful prose that lives up to the title.

“I wanted people to feel like they were having a beer with me,” Koch said. “That’s what I was going for.”

It's refreshingly candid, as anyone who has ever met Koch would expect. Instead of generally discussing Boston Beer’s lively corporate culture, for example, he fondly remembers a drunken escapade at a company meeting in New Orleans, right down to a late-night, fence-climbing, knife-wielding commando raid on a field of
Budweiser marketing inflatables.

But the part of the book I found most helpful for entrepreneurs was Koch’s explanation of his “Grow Skinny” philosophy, a strategy he was living more than 20 years before Eric Ries’ “The Lean Startup” became the manual for the modern tech startup.

Here are Koch’s five rules for growing skinny:

Grow organically – Koch started selling his beer bar-to-bar in Boston. This wasn’t his first choice, but every beer distributor in town turned him down, a setback he sees now as a blessing. It taught him the importance of prioritizing sales, and of knowing his customers.

As his beer started selling in a few bars, word spread and other bar owners started asking about it. This allowed him to settle into an expansion pattern he first used in Boston, then continued as the brand grew nationally and internationally. He didn't charge into new markets unknown. He waited for word of his tasty brew to spread.

“We continued to pursue organic growth, opening up new markets once wholesalers started calling us from those markets, indicating that potential demand existed,” Koch said.

Koch wasn’t above seeding demand. One liquor store just blocks from his office refused to carry Sam Adams in the early days, saying no one was asking for it. Koch took some empties from his warehouse and left them in the alley behind the store, knowing scavengers would find them, then return them to the liquor store for the bottle deposit. They did, and suddenly the store owner was seeing Sam Adams empties coming back to his store. His first order soon followed.

Have a simple and scalable business model – Koch brewed beer under contract, essentially renting capacity in existing breweries where he made his beer from a family recipe. Since there was plenty of excess capacity in the beer sector, as the industry consolidated and big brewers got bigger, there was plenty of capacity for Koch to rent as sales grew. This meant he was profitable almost immediately. It also meant he could expand production without having to raise a lot of capital.

“The main investment we had to make was hiring more salespeople, as well as a few others to provide support,” he said.

Indeed, once his company started to grow, Koch wanted to build his own brewery and began drawing up plans. Several million dollars into the design process, he realized he was suffering from what he called an “edifice complex,” lusting after the idea of owning a shiny new brewery when the reality was he didn’t need it. He wrote off the money he’d spent on plans, and kept growing.

Delegate quickly – Too many entrepreneurs “fall into the trap of believing (they) are better at any given job than someone (they) might hire,” he said. “This belief might hold true for a while. But it eventually impedes the growth of the company, the people, and even the founder.”

Koch and his partner - and only employee - did everything at first. But as Boston Beer Company began to take off, he quickly settled on three key roles.

“I decided in the late 1980s that I would focus my time on just a few key things: the quality of the beer, the quality of the people, and the culture. Everything else, I delegated to other people.”

Choose a partner wisely (The Rhonda Factor) – Koch knew from the start he needed a partner, both to share the workload and contribute skills he didn’t have. A Harvard Business School graduate himself, Koch was surrounded by talent at Boston Consulting Group. But as the resumes came in, he realized they were all people who looked a lot like him. They were business geniuses on paper, but “none of them had any experience in the beer industry, or even restaurants or bars, something I would definitely need if my company was to succeed.”

He realized that the person collecting the resumes for him, his administrative assiatant, Rhonda Kallman, was the answer. Underestimated because she was a “working as a secretary and she liked to party,” Koch saw that she was strong-willed and able to corrall the seven high-powered business consultants she worked for. She'd also worked as a bartender on the side, and knew the city's bars.

“Rhonda was a natural leader, not just becaue of her energy, drive, and willingness to work extraordinarily hard, but because of her ability to stay grounded,” Koch wrote. “To her, everything came down to people … Having somone as smart, dedicated, and trustworthy as Rhonda left me free to handle other parts of the business that required close attention.”

"String theory" ... make due with less - Koch developed what he calls his “string theory” when he dropped out of Harvard Business School in the 1970s to work for Outward Bound, a program that teaches life skills through wilderness training.

Among the gear issued to Outward Bound participants was a certain amount of heavy-duty string, to be used for everything from strapping gear down to stringing food up at night. Koch found that when he gave participants a large amount of string – as much as they needed, plus plenty extra - they invariably ran out. When he gave them just enough, however, they got the most out of it and made it last.

This applies to starting a business, and it’s a trap that over-funded startups fall into, Koch said. Both by hiring too quickly, and moving into bigger office space than they need, these companies foster a culture of inefficiency, often finding they have to scale back to survive.

“This lurching from overeating to crash dieting seems like an extremely unhealthy plan for growth," he wrote.

Koch argues that if a company has a problem to solve, “the least efficient way to solve it is to hire someone. … Don’t hire until employees will pay for themselves, either in more sales or cost savings, on day one,” he said.

Koch also kept his office space lean, saying “scarcity spawns invention, and invention is precisely what any company needs.”

I’m a veteran, award-winning journalist happily unshackled from the newsroom to look for the stories that are reinventing America’s industrial heartland. From startups to old-line companies; incubators to university research labs, I’m looking for ideas that solve important p...